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In answer sheet of example 2, a disposed car is not under WDA(main). So the allowance figure is 4,200(balancing allowance figure)* 70%(business purpose).
However, a car Jane bought later is under WDA (special), so the allowance figure is asset (16,000) *8% (special)* 70% (business purpose).
Because they both are non pool assets, I am confused of the way to treat assets which are disposed of. Why it is not under WDA? And the concept of balancing allowance/charge is clearly is the opposite of capital allowance but when can we apply this?@lila88 the first car there was a disposal which resulted in balancing allowance
The second car was not disposed hence it still qualifies for writing down allowance
Remember this formula
Tax Adjusted trading profit = adjusted trading profit – Capital allowance
When the resulted capital allowance results in a negative figure
The tax adjusted trading profit = adjusted trading profit + Capital allowance
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